ASC 606 Revenue Recognition Schedule

How to use it

Enter one contract — its value, term, any one-off fee, and how the customer is invoiced. The schedule shows what you recognise each month, what you invoice, and the deferred revenue balance that sits between the two.

Where the number comes from

• The subscription is recognised evenly across the term, because a service delivered continuously transfers to the customer continuously.
• A one-off fee spread over the term adds an equal slice to every month. Recognised at signing, it lands entirely in month 1.
• Invoicing follows the cadence you choose and is independent of recognition — that independence is the entire point of the standard.
• Deferred revenue is the running total of what you have invoiced minus what you have recognised. It rises when you invoice ahead and unwinds as you deliver.
• Where the term is not a whole number of billing cycles, the final invoice covers only the months that remain.

What goes wrong

The part most calculators leave out.

• The five-step model is not applied here. This assumes one performance obligation satisfied evenly over time. A contract bundling licence, implementation and support has several obligations, each needing the transaction price allocated to it by standalone selling price.
• Treating a set-up fee as distinct is the judgement auditors challenge most often. If the customer could not have bought the set-up separately and it has no standalone value, it is not distinct and must be spread.
• Usage-based and milestone contracts do not recognise evenly. Straight-lining variable consideration is a misstatement, not a simplification.
• Contract modifications — upgrades, mid-term expansions, early renewals — can require the remaining balance to be re-spread prospectively or the whole contract to be reopened. This schedule does not model them.
• This is a working schedule, not an accounting opinion. Revenue recognition is the area of GAAP where judgement matters most; check the treatment with your accountant before it reaches the ledger.

Questions

What is deferred revenue?

Money you have invoiced or collected for a service you have not yet delivered. It is a liability on the balance sheet, not revenue, and it converts to revenue as you perform.

Can I recognise an implementation fee immediately?

Only if it is a distinct performance obligation — broadly, something the customer could have bought on its own and that has standalone value. Set-up work that only makes your own subscription usable generally is not distinct and is spread across the term.

Does billing frequency change revenue?

No, and that separation is the core of ASC 606. Billing changes cash and deferred revenue; recognition follows delivery of the service regardless of when you invoice.

Does this work for IFRS 15?

The recognition mechanics for a single obligation satisfied over time are substantially the same under both standards. The differences appear in disclosure and in specific judgements, not in this arithmetic.

Does anything I type get sent anywhere?

No. The whole calculation runs in your browser. Nothing is transmitted, stored, or logged, and there is no account to create.